Leadership: Learning to Give Bad News in a Good Way.

Back in May 2003, over 2,500 people at the British Amulet Group learnt that they'd lost their jobs, when the company fired them by sending a text message. The message said, in part, "you are being made redundant with immediate effect”.

In 2006 a British company defended its decision to sack one of its staff members by SMS, claiming it was keeping in touch with the youth culture. The text message said: "We will not require your services anymore....Thank you for your time with us." In the same year, the US consumer electronics retailer RadioShack laid off 400 employees via email. “The work force reduction notification is currently in progress. Unfortunately your position is one that has been eliminated,” the ominous message supposedly read.

In 2010 Shayne Bolsher, a 39 year-old manager at Leicestershire's Fife Fine Foods, in the UK, was stunned to get his week's notice, in the form of a text message from his boss and employers have also used Facebook to deliver employees the bad news. Chelsea Taylor discovered that she had been 'let go' via a message posted to her Facebook wall by her manager.

Worse than the above is the manager who will avoid giving any form of bad news and will ignore the issue hoping it (or you) will go away. This doesn’t just have to do with being fired, but can be, as simple as, not responding to a request to talk about your future, or a recommendation you would like to make. Rather than explaining why they won’t have the meeting or discussion, they just avoid you and the issue.

This approach, though maybe less stressful for the manager, has a negative impact on the culture, motivation, commitment and respect of the employee or employees involved, (including their fellow colleagues that they share the experience with).

Surprisingly business might be able to learn something about the management and communication of bad news from the medical industry – an area where bad news can be much more serious than being fired, and can involve discussions about personal mortality.

In a 2005 article by Robert Buckman, MD, PhD, entitled, ‘breaking bad news: the SPIKES strategy;’ he describes a basic strategy for communicating bad news and suggests ways to assess the situation as it evolves.

As he explains when giving bad news to a client it’s important to “show empathy, explore the patient’s understanding and acceptance of what he or she has just learned, and validating that patient’s feelings can provide much-needed support to the patient, an essential psychological intervention for managing distress and helping the patient face the treatment decisions ahead. Although breaking bad news will never be easy, having a plan of action and knowing that you can support your patient through a difficult period should help considerably,” (p.138). Maybe these basic principles of communication apply to giving bad news in business, as much as anywhere else?

It’s interesting to note that in 1998, at the annual meeting of the American Society of Clinical Oncology, approximately 400 oncologists attended a session on breaking bad news. The oncologists were polled about various aspects of communication skills and training. Less than 5% of those present stated that they had received any training in breaking bad news. More than 66% indicated that they had to break bad news between 5 and 20 times a month; 74% indicated they did not have a specific approach planned for breaking bad news. More than 90% felt that the most difficult aspect of the communication was handling the emotions that arise during the interview, (Buckman, 2005, p.138). These responses may be just as applicable in business, as very few managers receive training in how to give bad news to employees.

The SPIKES strategy involves six core elements to consider before, during and after giving bad news;

1) Setting – which relates to the environment in which the bad news will be given; and the approach to be used, which would include being attentive and calm;
2) Perception – find out the perception of the person about to receive the ‘bad news’; are they worried, what have they heard already (via another manager or the ‘grapevine’);
3) Invitation – find out whether they want all the detail;
4) Knowledge – warn the employee that bad news is coming;
5) Empathy – sometimes it can be tempting to downplay the situation and withhold information; since this can reduce the stress for you and the employee. But this is not wise as it will only cause problems later, as the employee ‘receives’ more information;
6) Strategy and Summary – in conclusion, make sure that you summarise the bad news and that it is fully understood. Also, when necessary, agree further action and/or communication steps.

The SPIKES approach may not translate directly into a business model for every leader in every industry, but it gives a basic approach that can be modified and adapted for different situations, (especially where no plan or basic steps exist).

Remember the old saying – treat people like you would like to be treated yourself. If you have to give any form of bad news, have the courage and conviction to do it face-to-face, following the guidelines given above.

References

Buckman, R, A. (2005) Breaking bad news: the S-P-I-K-E-S strategy. Community Oncology, March/April, p.138-142.

Is the Customer Always Right?

Leading organisations are now ensuring that customer satisfaction becomes a critical success factor in their corporate strategic plans; where in the past, many executives would simply trust that improving customer satisfaction would lead to improved company performance. Today, executives have access to detailed research studies from 1990 to the present that have shown that higher levels of customer satisfaction lead to greater customer loyalty, which in turn has a positive impact on profitability. Other studies, over the same period, have also shown that satisfied customers also improve organisational growth and profitability by ‘introducing new customers’ through the influence of ‘word of mouth’ in conversation with friends and neighbours, (Homburg, Koschate and Hoyer, 2005, p.84).

Customer satisfaction relates to the comparison of the customer experience and the expectation; where it’s worth noting that there is a difference between focusing on ‘transaction specific satisfaction’ and ‘cumulative satisfaction.’ As Homburg, Koschate and Hoyer (2005) state, “transaction specific satisfaction is a customer’s evaluation of his or her experience with, and reactions to, a particular product transaction, episode, or service encounter; and cumulative satisfaction refers to the customer’s overall evaluation of a product or service provider to date,” (p.85).

Customer’s experience dissatisfaction when their product or service experience falls short of their expectations. This links to ‘disappointment theory’, which states that the greater the disparity between outcome and expectations, the greater the customer’s disappointment or elation.

This theory and the whole concept of customer satisfaction assumes that the customer’s expectations are correct in the first place. But is the customer always right and whose fault is it if the customer is, in fact, wrong? What if the customer’s expectations are incorrect?

99% of the time the organisation is at fault, and it is up to the organisation to ensure two key things; firstly that they interact with their customers to understand their expectations and second, that they are in a position to change those expectations when they are unrealistic. This also highlights the common principle of under promising and over delivering, not on a once-off, but on a continuous basis.

Jay Kandampully highlights that, “customers are becoming increasingly critical of the quality of service they experience. Customer demand and competition are forcing firms to cut loose from the traditional customer satisfaction paradigm, to adopt proactive strategies which will assist them to take the lead in the market place,” (p.431). Also, an organisations growth is highly influenced by its ability, not only to maintain but, to grow a loyal customer base – where one ratio that should be used to measure customer service is an organisations ‘returning customer ratio.’

With this in mind it has become critical for organisations to focus on customer service way beyond the short-term financial goal to the long-term relationship and loyalty value. The relationship value paradigm between; the customer and employee; the customer and the organisation; the employee and their organisation; the organisation and collaborative partnerships; has now become a significant factor in sustainable success.

Your customer’s expectations and perceptions are formed, in most cases, from the interaction the customer has with your front line staff. If these front line staff give the wrong expectations, real or perceived, then you can’t be surprised if your customers are dissatisfied with their experience. As Kandampully highlights “service management literature has repeatedly emphasised the importance of the human element in the delivery of superior service. Moreover the human propensity for the delivery of superior service is greatly enhanced by continuous service innovation,” (p.434).

Customer’s expectations are not only formed at the point of service contact, but also through your marketing strategy as well. Kandampully highlights how “management has failed to understand that the true purpose of marketing is to build and maintain relationships (bridge) between the producer and the customer thus reinforcing the producers promise and, ultimately, the bond between the producer and customer. There has been a change in the focus of marketing: transactional marketing emphasises the individual sale, whereas relationship marketing is designed to affect a long-term, on-going relationship,” (p.437).

In conclusion “the most successful service companies emphasise employees’ personal attention as the pre-eminent factor for service delivery. A firm’s relationship with its customers is instigated and established by the service personnel who interact with the customer day in and day out. It is the service personnel’s commitment to seamless, consistent and superior service that enables the firm to create an emotional, lasting, loyal relationship with the customer in which personal interaction assumes centre stage,” (Kandampully, 1998, p.438).

So is your internal and external customer always right? Yes, they should be and it’s your responsibility to make sure they are, through;

1) Actively listening to your customers needs and expectations;
2) Giving the customer the right message in the first place;
3) Proactively keeping the customer updated with new product and/or service developments; and
4) Where your customer’s expectations are unrealistic, for whatever reason, it is your responsibility to change these expectations through focused dialogue and accurate marketing and public relations.

References:

Homburg, C., Koschate, N. and Hoyer, W.D. (2005) Do Satisfied Customers Really Pay More? A Study of the Relationship Between Customer Satisfaction and Willingness to Pay. Journal of Marketing, Vol. 69, p.84-96.

Kandampully, J. (1998). Service quality to service loyalty: A relationship which goes beyond customer service. Total Quality Management. Vol. 9, No.6, p.431-443.

Learning from the Mistakes other Leaders Make

In an article entitled ‘Ten Fatal Flaws That Derail Leaders’ published in the Harvard Business Review (2009); Jack Zenger and Joseph Folkman, wrote that; “Poor leadership in good times can be hidden, but poor leadership in bad times is a recipe for disaster,” (p.18).

Through analysing two different studies of leadership that covered over 11,000 leaders, including Fortune 500 leaders, Zenger and Folkman compared characteristics of leaders who were fired over a three year period and those leaders that were considered least effective. They identified the 10 most common shortcomings, listed below, where every ‘bad’ leader had at least one of the characteristics, though most had several;

1. Didn’t learn from mistakes
2. Lacked clear vision and direction
3. Failed to develop others
4. Accepted their own mediocre performance
5. Lacked interpersonal skills
6. Resisted new ideas
7. Didn’t collaborate
8. Had poor judgement
9. Didn’t walk the talk
10. Lacked energy and enthusiasm

The list above may seem obvious, and yet Zenger and Folkman found that the leaders they studied weren’t even aware of their shortcomings, and worse still, in most case rated themselves significantly more positively.

As organisations move through and out of the global crisis, will leaders have learnt from their mistakes (and the mistakes of others) – are they willing to focus on accurate self-evaluation of their strengths and weaknesses as a leader; and then prepared to make the personal changes necessary.

Ronald Heifetz, Alexander Grashow and Marty Linsky (2009) highlight that “crisis leadership has two distinct phases. First is that emergency phase, when your task is to stabilise the situation and buy time. Second is the adaptive phase, when you tackle the underlying causes of the crisis and build the capacity to thrive in a new reality,” (p.64).

During a crisis the organisation looks for clear direction and vision from the leadership, even while accepting that the road ahead may be filled with twists and turns. Yet, “getting an organisation to adapt to changes in the environment is not easy. You need to confront loyalty to legacy practices and understand that your desire to change them makes you a target of attack. The art of leadership in today’s world involves orchestrating the inevitable conflict, chaos, and confusion of change so that the disturbance is productive rather than destructive,” (Heifetz, Grashow and Linsky, 2009, p.65-66).

Organisations, when faced with crisis, look for strong, effective, and reliable leadership, to guide them forward successfully. Different people all through the organisation will have different fears and expectations, but will also have different ideas that they would like to share.

Heifetz, Grashow and Linsky mention how; “in a period of turmoil, you must look beyond the merits and issues to understand the interests, fears, aspirations, and loyalties of the factions that have formed around it. In a period of sustained uncertainty, the most difficult topics must be discussed. Dissenters who can provide crucial insights need to be protected from the organisational pressure to remain silent. Executives need to listen to unfamiliar voices and set the tone for candour and risk taking,’ (p.67).

Finally, both during a crisis and the recovery the strategic and organisational leadership needs to involve the whole organisation in the generation of ideas and solutions. This can be achieved by increasing the information flow that allows managers and staff across the organisation to make independent decisions and share the lessons they learn from their innovative efforts. If leadership does not encourage and listen to the widest possible range of life experiences and views, including those of younger employees, they risk both planning and operating without a true picture of the shifting realities facing the business internally and externally,” (Heifetz, Grashow and Linsky, 2009, p.68)

References:

Heifetz, R., Grashow, A. and Linsky, M. (2009). Leadership in a (Permanent) Crisis. Harvard Business Review, Vol. 87, Issue 7/8, p.62-69.

Zenger, J. and Folkman, J. (2009). Ten Fatal Flaws That Derail Leaders. Harvard Business Review, Vol. 87, Issue 6, p.18.

Leader or Follower: What's the Future for the US Economy?

What can we expect to happen in the US after the mid-term elections on 2nd November – and what impact might this have on the Global Business Environment?

In The New York Times, (9th October), David Chen wrote, “with many Americans seized by anxiety about the country’s economic decline, candidates from both political parties have suddenly found a new villain to run against: China. In the past week or so, at least 29 candidates have unveiled advertisements suggesting that their opponents have been too sympathetic to China and, as a result, Americans have suffered”.

Polls show that not only are Americans increasingly worried that the United States will have a lesser role in the years ahead; they are more and more convinced that China will dominate. In a Pew poll conducted in April, 41 percent of Americans said China was the world’s leading economic power, slightly more than those who named the United States.

The Democrats cite studies this year from the Economic Policy Institute, a liberal research organization, that assert three million jobs have been outsourced to China since 2001 because of the growing trade imbalance. But Republicans, backed by some academics, say the number is much smaller. Indeed, Scott Kennedy, director of the Research Center for Chinese Politics and Business at Indiana University, said that most of the jobs that China had added in manufacturing through foreign investment had come from Taiwan, Hong Kong and South Korea, and not from the United States.

This is at the same time when a survey in the US showed the unemployment rate had held at 9.6%, meaning it has now topped 9.5% for 14 straight months, the longest stretch since the 1930s. These closely watched employment reports are the last updates before the November 2nd mid-term elections. On that date US voters will elect members of Congress, and there is a strong belief that voters opinion on whether the economy is recovering or sinking is likely to be a key influencing factor.

If problems with the economy and jobs weren’t enough for the current administration; a draft report by the National Oil Spill Commission appears to suggest the Obama administration was directly involved in controlling the oil spill message. More than 206m gallons (780m litres) of oil leaked into the Gulf before it was finally plugged on July 15. It has become the worst offshore oil leak in US history.

The panel, which was set up by President Barack Obama, found the White House denied an early request by government scientists to inform the public of its worst-case predictions. Carol Browner, the White House's energy and climate change director, said on August 4 "more than three-quarters of the oil is gone". The commission said her comments misrepresented the findings of a federal analysis, which had found the oil had "dissolved" and "dispersed" - but was never "gone".

After what seemed like world jubilation at the election of President Barack Obama, what is the future for politics and the economy in the US? If Fox News is right the Presidency could become a reality show in 2012. On 8th October they reported that Donald Trump may challenge Barack Obama for the presidency; "For the first time in my life, I'm actually thinking about it," Mr Trump, a self-declared Republican, told Fox News.

The businessman did not rule out the possibility of running as a representative of the Tea Party, the conservative movement that is seen as a sub-group of the Republican Part, but which some experts think could emerge as a third party. "I am a Republican but have great respect for what the Tea Party has done because they have brought to light what's going on. I mean, we have trillion-dollar deficits. The country is going bankrupt, let's face it," he added.

Mr Trump said that Barack Obama was ‘having a very hard time’ and that the US could be ‘doing much better with proper leadership’.

Trumps aspirations may not be that far fetched as US politics appears to be as much about ‘wealth’ and ‘media attention’ as anything else. Ms Nancy Pelosi, for example, the current Speaker of the House, has raised $52.3 million, since the beginning of 2009, for Democratic incumbents, candidates and the party’s Congressional campaign committee, (second only to President Obama among Democrats).

When you imagine how much money must have been raised by both parties; you can’t help asking yourself whether these funds are used in the best interests of the nation, at a time when many are still struggling with the recession; or used in the best interests of a few?

Will the mid-term elections in the US, on 2nd November, add further impetus to the US and international economic recovery; or could they be the spark that ignites another global economic crisis?

Is it Time to Develop Your Own Individual Brand?

As organisations fight their way out of the recession, the acquisition and retention of human talent is proving to be a significant competitive advantage. Yet as organisations start looking for managerial and other specialised talent to take them forward into the 21st century, how are you going to ensure that you stand out, as an individual, from the crowd of ‘look-a-like’ talented employees.

Creating a recognised individual image and ‘brand’ has normally been left to the lofty heights of the CEO’s and top entrepreneurs, yet individuals will now have to start ‘developing their image’ much earlier in their careers, maybe even as early as university, to ensure they stand out for the right reasons.

Getting yourself noticed isn’t about shouting the loudest or being the most arrogant or opinionated individual in a group – in fact this is likely to create the wrong image going forward. It’s finding a balance between expressing, sharing, and practically implementing your knowledge; and having the patience and empathy to listen to others opinion. It’s creating a ‘history’ where people want to ask your advice and opinion; and where you accept these questions with grace and without letting the attention go to your head.

Organisations aren’t only going to be looking for individual talent, but talent that is able to work effectively with other talented individuals, in strategic or operational teams - finding the optimal solutions for their organisations, without a need for personal recognition.

In creating your own unique image and brand you should consider the following factors;

1. Develop a skill and talent you enjoy (and never assume that you’ve learnt enough about the subject);

2. Develop a basic understanding of the generic principles that drive a successful business;

3. Learn advanced communication skills, like NLP, that will give you an advantage when communicating with others;

4. Never assume that you are superior to anyone and learn to be humble (people will see your skills for what they are in practice, if you have to sell yourself too hard, maybe you still have a lot to learn);

5. Be aware of your image at all times, and learn to be confident, (but never over confident);

6. Network effectively, as you want people to remember your name for the right reasons;

7. Never burn your bridges (and learn to control your emotions);

8. Learn to be a good leader and a good follower (as you’re likely to have to perform both rolls as your career develops);

9. Become someone who can be trusted and relied on;

10. And when, at last, you have developed your personal ‘brand’ and are successful, never forget the journey, the people who supported you along the way, and don’t turn your back on others starting off on the same journey.

Talent acquisition and retention will become a core strategy for many organisations that have learnt from their mistakes in their journey through the global recession. For those individuals that have ambition, being part of one of these organisations must be your goal. This won’t only be the large multi-national organisations; as all organisations, large and small, whether in a global or niche market, will focus on talent management and development to give them a superior competitive advantage.

It’s time to get yourself noticed for the right reasons, so start developing your personal image, and create those business networks that will mean your name is on employers lips when they are searching for the best in your field. That doesn’t mean being a ‘yes man’ or worse - it means being knowledgeable, reliable and an effective team player, focused on organisational success.